Crown Castle (CCI) shares jumped after activist investor Elliott Investment Management said it wants executive and board changes.
TD Cowen raised its price target on Domino’s Pizza (DPZ) to $430 from $410, with analysts saying they see the pizza chain's upcoming investor day as a "turning point."
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JOSH LIPTON: And turning now to some of today's trending tickers. First, we're taking a look at shares of iRobot. They are taking a hit. Stocks under pressure here as the fate of its $1.4 billion deal with Amazon hangs in the balance. So, here was the headline, Julie, is the European Commission-- they have questions.
JULIE HYMAN: Yes.
JOSH LIPTON: Yeah. They have concerns. They have issued what is known over there as a statement of objections, and basically saying one, Amazon's deal could negatively impact the market for making and supplying these robot vacuum cleaners. And two, could strengthen its role in the online marketplace. IRobot, as you can see, they're really getting hit hard in today's trades. It was the biggest intraday drop, by the way, in years on that headline.
JULIE HYMAN: I kind of love the statement of objections. It's a little bit like the airing of grievances. The statement of objections here. What's interesting-- there's a couple of interesting things about this. First of all, this is in contrast with the British approval of the deal here. So, now you've got a little bit of a conundrum where one of the regulatory agencies has these concerns that now Amazon has to come back, or the two parties have to come back, and address.
This deal was announced back on August 5 of 2022, so this has been a long running situation that Amazon is waiting to get approved. It's a $1.3 billion deal. And by the way, those iRobot shares have fallen more than 40% in that period, so that doesn't seem to reflect a lot of optimism that the deal is indeed going to close.
JOSH LIPTON: Yeah. I think-- maybe some of this, too. As we saw a recent Reuters piece that suggested it was going to close. There wasn't going to be an issue. So maybe this is just some investors getting caught off guards. The date on the calendar, though, is February 14. That is when the Commission, apparently, is going to choose whether to approve the deal with concessions or block it.
JULIE HYMAN: That's very romantic, Valentine's Day. Let's talk about Crown Castle, too because that company is facing revived pressure from activist investor, Elliott Management, to make executive and board changes. Crown, by the way, Crown Castle issued a statement in response saying it is open to commencing a constructive engagement with Elliott. Those Crown Castle shares are moving higher today. This is a wireless tower operator. It leases out it's actually a REIT-- a real estate investment trust, and it leases out its towers to the wireless phone providers-- the Verizons and AT&T's of the world here.
It's down here today. We've seen a lot of pain in the REITs, so it's not unusual in that sense, but Elliott says the stock price is near six year lows. And the underperformance that they looked at back in 2020 is only worsened. That's according to Elliott managing partner, Jesse Cohen.
JOSH LIPTON: Yeah. So, this is Paul Singer making moves. This is his firm, Elliott Management, and they want to see changes. They disclosed this $2 billion stake. They want new management. They want new board leadership. They want to review the fiber business-- that's just among other issues. Saying they're going to nominate new directors for the majority of positions on Crown Castle's board.
And Elliott emphasized the stock price, as you noted, really near multi-year lows here. Said current leadership at the company has, quote, "Destroyed billions of dollars in value through its capital allocation decisions," and of course this is what Elliott does and does very effectively for a long time-- gets a stake, rattle some cages, make some changes.
JULIE HYMAN: Yeah, we'll see if the changes work. Just looking year-to-date, American Tower, which is probably the closest competitor to Crown Castle, down about 4%.
JOSH LIPTON: Right.
JULIE HYMAN: Crown Castle, down about 20%.
JOSH LIPTON: Yeah. Rough. And finally here, Domino's pizza getting a bullish call from TD Cowen. The firm raising its price target on the stock, citing optimism on the company's US turnaround. So, they like what they see here, Julie, they go-- their target goes to 430, it looks like, from 410. Say they are bullish on the company's US turnaround. A date on your calendar they mark would be December 7th. That is Domino's investor day, they note. Analysts saying that could be a turning point marking this, what they see, acceleration in US comparable sales.
JULIE HYMAN: Yeah. Interesting here that they're looking at that date, and they also talk about the launch of Uber Eats at the end of this year for Domino's. Remember, there had been like years of reluctance to partner, right, with some of the companies like that. Although, I'm not sure from which end the reluctance was coming.
But in any case, they talk about some measures that the company will be taking in concert with that Uber Eats launch as being positive for the company. And they're looking at 5% comps and-- 5% comps for 24 and 25 for the company as a result of all of these measures. So, we'll see.